China IC Market Development Trends

China IC Market Development Trends

By SMM (Semiconductor Manufacturing Magazine)

Under the continued effects of the global economic downturn, Chinese electronics products export growth slowed in 2012, but mobile smart devices are growing more quickly, while the drop in most other product markets is stabilizing. Therefore, under the restriction of various factors at home and abroad, Chinese IC market size in 2012 increased to RMB 855.86 billion, slowing to 6.1 percent, but the market growth is still significantly higher than the global market.

China IC Sales Market Size and Growth Rate 2008-2012 (Data Sources: CCID)

China IC Market

In terms of product structure, the memory market share was up to 20.2 percent in 2012, falling by almost 1.2 percent. Why?  After a previous price adjustment in 2012, Taiwan manufacturers left some product segments like DRAM. Other manufacturers also gradually adjusted their capacity although prices gradually stabilized and rebounded. While the slow momentum for PC sales is not likely to change, the decline in sales growth’s market share for CPU products, similar to the PC market, has decreased. In addition, in the face of a more prosperous NAND flash market, major manufacturers have adjusted their distribution capacity, making their products competitive, resulting in lower average price market fluctuations. Moreover, ASSPs with the emergence of various specialized highly integrated chips, especially the rapid growth of the mobile intelligent device, help the market keep more than 10 percent growth and increased market share.

China IC Products Market Structure 2012 (Data Sources: CCID)

China IC Market

With respect to application structure, computer, communications, and consumer electronics, the IC market is still China’s main application market, contributing to a total of 87.2 percent of the overall market share.  This growth, thanks to the increase in demand for IC’s due to the growth in mobile intelligent devices such as mobile AP, touch screen control chips, baseband, RF IC and so on, has made network communication the IC with the most market growth in China’s 2012 primary market segment.  Global computer volume has directly led to the decline in China’s IC market growth in computing – slowing the computer class IC market and dropping it to a decline of 42.7 percent in 2012 while the market growth rate sits at only 1.2 percent.

In 2012 China's IC Structure of Market Application (Data Sources: CCID)

China IC Market

Industrial Control 7.4%, Computer 42.7%, Automotive Electronics 2.1%, Network Communications 22.4%, Consumer Electronics 22.1%, Other 3.3%

China IC Market Development Trend Analysis

As the global economy improves, reliance on export-led China electronic product demand is expected to increase and OEMs will speed up purchasing and replenish the IC product inventory.

 

The size of the market will gradually shrink for PCs which will directly affect memory and CPU market development. Automotive electronics growth, with the increase of car ownership per capita, is expected to rise gradually. Industrial control and network communication will continue to be a point of growth in the future.

2008-2015 China IC Market Size and Growth (Data Sources: CCID)

China IC Market

In 2015 China's IC market applications structure and growth (Data Sources: CCID)

In addition, as the application environmental modification, industry application, POS, and ATM work reaches completion, each big bank IC card replacement will be a step toward entering the stage of comprehensive and rapid growth in 2013 where the IC card class and, consequently, the IC market will have broad prospects.

China IC Market

Industrial Control 9.4%, Computer 36.9%, Automotive Electronics 2.5%, Network Communications 27.3%, Consumer Electronics 22.6%, Other 1.4%

As a wide range of industries use medical electronics, security electronics and sustained and in-depth information construction, these segments will occupy more and more of the market share in IC products. As a whole, China’s IC market will have smooth and slow growth in the next few years.

Originally published in SEMI’s Semiconductor Manufacturing Magazine.

 

July 1, 2013